What Makes a Contract Valid Law

A contract is an agreement between two or more parties that creates an obligation to do or not do something. It is an essential tool for business transactions and serves as a legal binding document that ensures both parties are held accountable for fulfilling their promises. In this article, we will explore what makes a contract valid under the law.

Essential Elements of a Contract

A contract is valid only if it meets certain requirements that make it legally enforceable. These requirements are often referred to as the essential elements of a contract, which include:

1. Offer and Acceptance: An offer is a proposal made by one party to another, indicating a willingness to enter into a contract. Acceptance is the response by the other party to the offer, indicating agreement to the terms of the contract.

2. Consideration: Consideration is the exchange of something of value between the parties. In a contract, it is usually money, goods, or services.

3. Capacity: Both parties must have the capacity to enter into the contract. This means they must be of legal age, mentally competent, and not under duress or coercion.

4. Intention: Both parties must have the intention to create a legally binding agreement.

5. Legality: The purpose of the contract must be legal.


Once the essential elements of a contract are established, it is important to have both parties sign the document. This signature serves as proof that the parties have agreed to the terms of the contract.

Types of Contracts

There are two types of contracts: verbal and written. Verbal contracts are made through spoken words and do not require a written document. However, they can be difficult to enforce in court without evidence of the agreement. Written contracts are more formal and provide legal protection to both parties.


To ensure the validity of a contract, it is important to make sure that it meets all the essential elements required by law. A contract that lacks any of these elements will not be enforceable in court. In addition, contracts that are illegal, fraudulent, or against public policy are invalid and unenforceable.


In summary, a contract is valid under the law if it meets the essential elements of offer and acceptance, consideration, capacity, intention, legality, and is signed by both parties. A valid contract protects both parties and ensures that the agreement is legally enforceable. As such, it is important to ensure that the contract complies with the legal requirements to avoid any disputes or legal complications in the future.